US sanctions Wagner’s gold and diamond operations

The measures had been put on hold as US officials sought to avoid appearing to favour a side in the Prigozhin-Putin power struggle.

The Central African Republic gave the rights to the N’dassima gold mine to the Wagner Group’s Midas Resources. Picture: Maxar Technologies

The US government has imposed sanctions on the gold and ­diamond operations of Wagner Group in an attempt to undercut the funding of the Russian mercenary organisation that has dispatched tens of thousands of soldiers to the war in Ukraine.

The sanctions target four companies that operate in the Central African Republic, the United Arab Emirates, Mali and Russia and are connected to the group’s owner, Yevgeny Prigozhin.

US Treasury officials had long planned to enact the sanctions, according to a State Department official, but hesitated briefly to avoid taking sides in the short-lived mutiny that resulted in a break between Russian President Vladimir Putin and Mr Prigozhin.

Under the sanctions the US will block any financial transactions by the newly targeted entities and Americans are generally prohibited from dealing with them.

Two of the operations in CAR, Midas Resources and Diamville, were revealed as Wagner entities involved in the gold and diamond business in a Wall Street Journal investigation. It found Wagner had providing the CAR President with armed protection in exchange for natural resources.

The CAR government stripped concessions of local gold mine N’dassima from a Canadian company and handed the rights to Wagner’s Midas Resources. Midas developed the mine into the first industrial gold operation in the former French colony.  “Recent reporting indicates that the Wagner Group is working to expand its gold mining and processing operations in N’dassima in CAR, potentially earning the ­organisation significant new ­income,” according to the notice issued by the US Treasury’s Office of Foreign Assets Control.

The company Diamville hadn’t been previously sanctioned by the US government, but had been targeted in February by the EU for its role in illicit gold and diamond trades.

“The US government is committed to addressing the relationship between gold and the illicit revenue streams that contribute to and fund conflicts, corruption, and other concerns in sub-Saharan Africa,” the Treasury notice states.

Treasury also confirmed that Wagner has prevented CAR government officials from visiting the region where the Midas mine is located. “This also allows the Wagner Group to extract and ­export gold outside of official channels, thus depriving CAR of royalties and other revenues,” the notice says.

In addition to sanctioning CAR companies, Treasury sanctioned entities in Mali, the UAE and Russia, among them DM, a limited liability corporation that conducted gold sales, and Industrial Resources General Trading, a Dubai company that provided support to Diamville. Treasury also sanctioned Andrey Nikolayevich Ivanov, a Russian who the US government said has been central to Wagner units in Mali.

The Wall Street Journal